Bryson & Pember

In *Bryson & Pember* [2013] FamCA 43, the Family Court of Australia considered whether a bankrupt husband's right to apply for property settlement orders under section 79 of the *Family Law Act 1975* (Cth) vested in his trustee in bankruptcy. The wife sought to dismiss the husband's application for property settlement and spousal maintenance, arguing that his right to bring such proceedings had passed to his trustee upon his bankruptcy and had not subsequently revested in him.

The court was required to determine two primary legal issues: first, whether the right to apply for property settlement orders under section 79 of the *Family Law Act* is itself considered "property" for the purposes of the *Bankruptcy Act 1966* (Cth); and second, whether such a right, if it is property, vests in a trustee in bankruptcy. The husband had been declared bankrupt in March 2009 and discharged in March 2012, shortly before filing his property settlement application.

Justice Forrest analysed the definition of "property" under the *Bankruptcy Act* and the nature of a "chose in action". He noted that section 58(1)(a) of the *Bankruptcy Act* vests "the property of a bankrupt" in the trustee. The court considered various authorities on the definition of a chose in action, including *Loxton v Moir* and *Krischell Pty Ltd v Nilant & Ors*. The central question was whether the right to initiate family law property proceedings constituted a proprietary right that would pass to a trustee. The court distinguished between a right to litigate and a chose in action, and further, between a chose in action and property.

The court ultimately dismissed the wife's application. It held that the right to apply for property settlement orders under section 79 of the *Family Law Act* is not, in itself, a chose in action or property that vests in a trustee in bankruptcy. Such a right is a personal right to seek a court order, and it is only upon the making of such an order that an interest in property might devolve upon the applicant. Therefore, the husband retained the standing to bring his application for property settlement and spousal maintenance.